Ensure Your Assets Remain Secure in Wisconsin By Knowing More About Bankruptcy Exemptions
Navigating the complexities of bankruptcy in Wisconsin brings forth crucial questions, and one major query that often arises is, “What assets are exempt from bankruptcy in Wisconsin?” Understanding the exemptions available is pivotal for those considering this financial avenue. Bankruptcy is a legal remedy for overwhelming debt, providing a fresh start by eliminating some debts and structuring repayment for others. Wisconsin, like other states, has specific exemptions to protect essential assets from liquidation during bankruptcy. These exemptions aim to help individuals rebuild without losing everything.
Explore the details of Wisconsin’s bankruptcy exemptions, focusing on the assets exempt from bankruptcy. Whether it’s Chapter 7 or Chapter 13 bankruptcy, understanding these exemptions is vital for informed decisions and empowering your journey toward financial recovery.
Short Summary:
- Facing bankruptcy in Wisconsin can be overwhelming, and understanding asset exemptions is crucial.
- Facing bankruptcy in Wisconsin can be overwhelming, and understanding asset exemptions is crucial.
- Bankruptcy provides a legal remedy for debt relief, eliminating some debts and structuring repayments.There are two common types: Chapter 7 (liquidation) and Chapter 13 (reorganization).
- Chapter 7 involves selling non-exempt assets to repay creditors. That is suitable for individuals with limited income and significant unsecured debts. Note that many types of property (assets) are exempt under state and federal laws.
- In Chapter 13, assets are generally safe as the debtor commits to repaying all debts over time. Payment plan depends on factors, such as income, owned assets, and non-exempt estate value.
- Wisconsin has specific exemptions to protect essential assets during bankruptcy, allowing individuals to rebuild without losing everything.
- Individuals in Wisconsin can also choose between state and federal rules to protect assets. Notable exemptions include those for motor vehicles, homesteads, personal property, bank deposits, alimony, child support, and more.
- To file for exemption, residents must live in Wisconsin for over 180 days to file for bankruptcy. Requires at least 730 days of residency before filing, or exemptions from the previous state apply.
- Remember that it is a cautionary measure when exempting property. Trustee reviews exemptions; disagreements can lead to an informal resolution or a court decision.
What is Bankruptcy?
Bankruptcy is a legal process designed to help individuals, businesses, or entities that cannot repay their outstanding debts. It provides a structured and court-supervised method for debtors to either eliminate their debts (through a discharge) or develop a plan to repay creditors over time. The primary goals of bankruptcy are to offer individuals and entities relief from overwhelming debt, protect assets from liquidation, and provide a fair distribution of available assets to creditors.
Types of Bankruptcy
There are several types of bankruptcy, each defined by a chapter of the U.S. Bankruptcy Code. The two most common types for individuals are Chapter 7 and Chapter 13:
- Chapter 7 Bankruptcy (Liquidation): In this form of bankruptcy, a trustee is appointed to sell the debtor’s non-exempt assets to repay creditors. However, many types of property are exempt from liquidation under state and federal laws. Chapter 7 is often known as “straight bankruptcy” and is suitable for individuals with limited income and significant unsecured debts.
- Chapter 13 Bankruptcy (Reorganization): This type involves creating a court-approved plan for the debtor to repay creditors over a period, usually three to five years. Chapter 13 is suitable for individuals with a regular income who want to keep valuable assets, such as a home, but need time to catch up on missed payments.
Bankruptcy can be initiated voluntarily by the debtor (voluntary bankruptcy) or, in some cases, involuntarily by creditors. It’s essential to note that not all debts are dischargeable in bankruptcy, such as certain taxes, child support, and student loans. The specific rules and processes can vary depending on the type of bankruptcy and jurisdiction.
What Assets Are Exempt from Bankruptcy in Wisconsin?
In Milwaukee, if you owe money and need to file for bankruptcy, you can decide if you want to use state or federal rules to protect your stuff. That is great because Wisconsin is one of the few states that lets you make this choice. So, when you’re going through bankruptcy, we can assist you in looking at both options and picking the one that keeps your belongings safe.
Here are some crucial exemptions to protect your belongings during bankruptcy in Wisconsin, including:
Motor Vehicle Exemption
- $4,000 for your car (or $8,000 if you file with your spouse)
Homestead Exemption
- $75,000 for your home (or $150,000 if you file with your spouse)
More Wisconsin exemptions to know about:
- Personal property, such as household goods, appliances, clothing, jewelry, and more, is protected up to $12,000 in total value.
- Bank deposits up to $5,000 are exempt.
- Alimony and child support are protected if necessary for support.
- Insurance benefits, like those from accidents, federal disability, fire insurance, and life insurance payments, are safe from being taken during bankruptcy. Additionally, any money you get as dividends from life insurance contracts is protected up to $150,000 (or $4,000 if you got the insurance less than two years before filing for bankruptcy).
- Social service payments are protected.
- Various pensions and retirement benefits are exempt, including veterans’ benefits, war pensions, certain municipal employee pensions, public employee pensions, and tax-exempt retirements.
- Burial property, including tombstones, coffins, and owned cemetery lots, is protected.
- Trade implements and family business tools, equipment, and professional books up to $15,000, or a closely-held company, are exempt.
- Wages earned during imprisonment are exempt for prisoners.
- Wages are protected at 75% of weekly income, not less than 30 times the greater of state or federal minimum wage, if reasonably necessary for support.
- Workers’ compensation benefits are exempt.
- Veterans’ benefits are exempt.
- Unemployment compensation is exempt, except for child support claims.
- 100% exemption for crime victims’ compensation and benefits from fraternal benefit societies.
Exemptions Under Chapter 7 Bankruptcy
If your belongings aren’t protected from creditors, filing for bankruptcy, especially Chapter 7, might be a good choice. However, even with Chapter 7, your assets could still be at risk in some situations. If that’s the case, your better option might be to consider Chapter 13 bankruptcy.
How Does Chapter 13 Help?
In Chapter 13 bankruptcy, your belongings are usually safe because you commit to paying back all your debts over time. It involves creating a payment plan, and the amount you repay depends on factors like what you own, your income, and the value of your non-exempt estate. A legal professional can help protect your assets through “exemption planning,” making non-exempt assets exempt.
When Can You Use Exemptions in Wisconsin?
You must have lived in Wisconsin for over 180 days to use the state’s bankruptcy rules, but you must be a resident for at least 730 days before filing. If you haven’t lived in Wisconsin for that time, you’d use the exemptions from your previous state.
How Do I Avoid Issues with Bankruptcy Exemptions in Wisconsin?
Be cautious when exempting your property. The bankruptcy trustee, the person in charge of your case, will check the exemptions. If the trustee disagrees with your choices, they may try to work it out informally. If that doesn’t work, the trustee can file an objection with the court, and a judge will decide if you can keep the property.
Call Our Bankruptcy Attorney to Help You Keep Your Assets in Bankruptcy!
Are financial troubles overwhelming you in Wisconsin? The fear of losing your assets in bankruptcy can be paralyzing. Enter Miller & Miller Law, LLC – your shield against the storm. We understand our client’s pain points, and our attorneys are committed to crafting strategic solutions to discover what assets are exempt from bankruptcy in Wisconsin to safeguard your most valuable possessions. With Miller & Miller Law, LLC, you’re not just getting legal representation; you’re gaining a partner committed to securing your financial well-being.
Our law firm in Milwaukee, WI, has successfully guided countless individuals through bankruptcy, ensuring their homes, cars, and cherished belongings remain protected. We pride ourselves on delivering personalized legal services tailored to your unique needs. It’s time to break free from the shackles of financial stress and take control of your destiny.
Ready to secure a brighter financial future? Take the first step towards peace of mind. Contact Miller & Miller Law, LLC today for a free case evaluation. Our team is here to turn your challenges into opportunities, providing you with the support and competence you need in bankruptcy to emerge stronger and more resilient.
